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playing games
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During the annual discussions about whether North Carolina would ever adopt a lottery, some opponents expressed concern that if the lottery ever became reality, it might result in less money for public education.
No one wants to hear “we told you so,” but it appears those concerns were valid. State budget officials already are planning to use revenue from the new lottery to replace current school funding – about half the revenues from the $400 million that a new lottery is expected to generate.
“There is a pretty big disconnect, I do believe, between what is the public perception and what the actual legislation allows about the uses of lottery revenue,” state Auditor Les Merritt said.
That isn’t what many were expecting after legislators said repeatedly last year they wanted lottery money used to increase education spending – not replace it.
State budget planners said in a recent presentation to debt-rating agencies that $210 million of lottery proceeds will replace money now going to the pre-kindergarten More at Four program and to reduce class sizes in kindergarten through third grade.
Gov. Mike Easley says it’s time to use that money elsewhere.
Easley fiscal adviser Dan Gerlach said a big part of the freed-up cash will help pay to increase teacher salaries to the national average.
When Easley signed a lottery bill into law Aug. 31, the measure promised the gambling proceeds would add to and not replace existing school revenue. But the state budget Easley had signed two weeks earlier overrode the pledge that lottery profits would only add to current education spending.
“In all likelihood, the public was hoodwinked,” said Elaine Mejia, director of the N.C. Budget and Tax Center in Raleigh, which opposed the lottery. “If the governor had said this will support education programs already in place, I doubt it would have passed.”
Mejia has long argued that it’s hard to show that lottery funding boosts education spending. In other states with lotteries for education, general tax funding for schools dropped over time.
“We warned that it wouldn’t be new money,” she said. “Will the money go for a tax cut? Better state employee pay? More prisons? We will never know.”
Chris Fitzsimon, head of the public policy organization N.C. Policy Watch and a former member of Citizens United Against the Lottery said:
“I think it means that we have been misled about what the lottery means to education. The opponents of the lottery were correct when we said that the lottery wouldn’t help education at all. It will simply replace money that’s already being spent.”
Easley officials said they would show at budget time this spring where the extra money they are freeing up from current programs will go.
“It seems obvious to me that the $400 million plus in new education lottery revenues will increase support for education,” Easley wrote Merritt in December.
Meanwhile, The North Carolina Education Lottery – that’s its full name – hired a Raleigh firm last week to coordinate its estimated $8 million advertising program.
Howard Merrell & Partners won the bid over three other competitors but withdrew and the job went to a Charlotte firm. Advertisers will immediately begin a campaign for scratch-off games, projected to begin March 30.
Those will be followed by Powerball two months later.
The ad agency will be paid an amount equal to 11 percent of the advertising budget in its first year and 10.5 percent for the next two years.
Tom Shaheen, executive director of the lottery, said that managing the advertising would be difficult because state law prohibits aggressive lottery advertising that highlights the benefits of striking it rich. The law also says that lottery advertising can’t directly induce people to play.
Eight million bucks for non-aggressive advertising. Go figure.
Reprinted with permission from The Daily Southerner of Tarboro.